Foley Testifies He Devised Sham Contract For Rowland

EDMUND H. MAHONY, emahony@courant.com

Brian Foley's bombshell testimont in John Rowland trial.

NEW HAVEN – Brian Foley, owner of a nursing home chain and No. 1 backer of wife Lisa Wilson-Foley's political ambition, acknowledged Monday that it was his idea to hide former Gov. John Rowland's work for his wife's congressional campaign by paying him as if he were a business consultant.

The plan came to him in September 2011, six months into Lisa Wilson-Foley's campaign for Congress in the state's 5th District, Foley testified at Rowland's campaign finance fraud trial in federal court

Rowland had asked for – and been given - a chance to pitch the Foleys on what he could bring to the crowded congressional race. Foley said he and his wife were impressed. They wanted Rowland working on the campaign. But, Foley said, they were afraid of what the opposition would do when Wilson-Foley filed mandatory federal campaign reports disclosing that she had hired an ex-governor convicted of bribery for political advice.

"It would be a big negative," Foley testified. "I was trying to find a solution."

It came to him a day or two after listening to Rowland's pitch, apparently – as Foley recalled from the witness stand — after a refreshing night's rest. Foley thinks he was sitting on a couch watching television in the couple's Simsbury home. He thinks his wife was leaving for work.

"I said, 'I may be able to hire Rowland for some work at Apple,' " he testified, referring to Apple Rehab, his nursing home chain, "And Lisa responded, 'Well that's good.' I think I might have said to Lisa, 'Why don't you have him call me.' "

Foley said his wife appeared "positive" and pleased with his suggestion. Within hours, Foley said, he received an email message from Rowland:

"Had a brief chat with Lisa," Rowland wrote in the email, displayed for jurors on a courtroom monitor. "I get it. Let's you and I meet."

A month later, in October 2011, Foley testified, his nursing-home lawyer had drafted a contract that appeared to retain Rowland as an Apple business consultant. After signing his copy, Rowland fired off another email to Foley.

"Don't remember if I put JGR Associates as the company on the contract, but that will give us more cover as well vs. individual," the email said.

"My understanding is," Foley answered, "it really is cover for the fact that I really am paying for working on the campaign … That's why we put it though (the lawyer) because we felt it would never be discovered."

Foley is one of the government's most important witnesses and prosecutors treated the Rowland email Monday as a key element of their case. It was one of several documents that prosecutors have argued show that Rowland knew he and Foley were entering into an empty business arrangement designed exclusively to defeat federal campaign spending reporting laws.

Rowland and both Foleys are charged with conspiring to circumvent Federal Election Commission rules. After fighting the charges for 18 months, the Foleys changed course earlier this year. Both pleaded guilty in return for lenient sentences and Foley testified Monday that he agreed to cooperate in the investigation of Rowland.

Rowland refused a plea bargain offer and is fighting charges that will likely send him to prison if he is convicted of all charges. His lawyer, Reid Weingarten, told jurors in his opening statement that Rowland performed valuable work as an Apple consultant and that he volunteered his services to the Wilson-Foley campaign.

Foley testified briefly on Friday and all day Monday. Weingarten had only minutes at the end of the day Monday to begin his cross-examination, which will continue Tuesday and is likely to focus on Foley's credibility and what, if anything, Rowland did for Apple and $35,000 in consulting fees.

Weingarten began to prod Foley late in the day, when he elicited the admission that Foley used close family members – his children, his sister, a niece and a nephew – as straw donors in a scheme to channel maximum allowable contributions to the Wilson-Foley congressional campaign. Foley admitted that he contributed the money in the names of his relatives, a violation of federal law. He said he gave his wife $500,000 of his own money and she spent it on the campaign.

"So three of your children were put at risk because of your desire to fill Lisa's campaign war chest?" Weingarten asked.

"I didn't see the risk as being great, but the answer is yes," Foley testified.

Foley seemed unfazed by the questioning. During more than a day on the witness stand, his answers were brief and precise and he sounded at times detached, as if he were recalling someone else's behavior.

He told Weingarten he spent about 60 hours with the prosecution preparing to testify.

Many of the prosecution questions Monday were directed at the precautions Foley said he took in an effort to prevent anyone – including his wife's political opponents and federal election regulators — from learning that Rowland was secretly on the campaign payroll.

Foley said he and Rowland agreed to the arrangement in principle at a breakfast meeting at the Farmington Marriott.

He said Rowland, who did most of the talking, moved quickly to a discussion of salary.

"He started off talking about Mark Greenberg and not wanting to work for his campaign," Foley testified. "That he didn't like him, however (Greenberg) was offering him $7,500 to $8,500 a month to be a consultant."

Greenberg, a candidate for Congress in 2010, testified earlier and said that he rejected what he considered to be a dubious consulting proposal from Rowland during the 2010 campaign. Greenberg said Rowland wanted $790,000 over 26 months.

Foley testified that he and Rowland decided on $5,000 a month.

Afterward, Foley said he took steps to create the fiction that Rowland was being paid for nursing home consulting. He said he introduced Rowland to executives at Apple, had him tour a nursing home, created phony lists of assignments and arranged to have the arrangement approved by two unwitting lawyers.

Foley said he had the contract written to make it appear that Rowland was employed by a nursing home lawyer. In addition, Foley said, he paid Rowland with personal funds that were diverted through a real estate company he owns.

Foley said he told no one at Apple that the contract was a deception.

"That would be a smoking gun," Foley testified. "I never, never did that over the whole two years. I was careful not to use those words that would acknowledge that this would be for the campaign."